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Why Accounting?Why Accounting?

• Financial Literacy – what does that mean?

• What does taxation have to do with me?

• What can a career in accounting do for me?

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Financial LiteracyFinancial Literacy

• Definition - is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others.

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Financial Literacy CrisisFinancial Literacy Crisis

• Flunking - Most Americans have extremely low levels of financial literacy, research suggests, despite its importance.

• https://www.youtube.com/watch?v=21PuqepQ5Hk

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Financial LiteracyFinancial Literacy

• BUS 147: Personal Finance• This course assists students in gaining

the knowledge, tools, attitude, and skills needed to make informed lifelong financial decisions that will empower their lives.

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Introduction to TaxationIntroduction to Taxation

• An income tax was first enacted in 1861 and repealed after the Civil War ended

• An income tax law was passed in 1894 and was rejected by the Supreme Court in 1895.

• Sixteenth Amendment to the Constitution was passed in 1913– This is the basis of modern income tax law

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Taxation Taxation

• About 145.6 million individual income tax returns were filed in 2011– Almost 83% were filed electronically

• Individual income tax collections were about $1.04 trillion in 2011 – Uncle Sam took a lot of your money!!

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Taxation Taxation

• But, if you can help people reduce the amount of money that they pay to the government – they will pay you!!

• Making good by doing good

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TaxationTaxation

• Become a California Registered Tax Preparer (CRTP) – meaning that you can charge $$$$ for doing returns - just by taking just one class here at MiraCosta College

• ACCT 145 – Individual Income Tax

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The Income Tax FormulaThe Income Tax Formula

Income − Permitted Deductions from Income -------------------------------- = Taxable Income × Appropriate Tax Rates--------------------------------= Tax Liability− Tax Payments and Tax Credits---------------------------------= Tax Refund or Tax Due with Return

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TaxationTaxation• Taxpayers annually file a tax return

using – Form 1040– Form 1040A– Form 1040EZ

• All follow the basic income tax formula• And then there are the State returns

as well – can you say bank!

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Accounting CareersAccounting Careers

• CPA – Certified Public Accountant– Internationally recognized certification– Can lead to may exciting and well paying

career opportunities– Average starting salary in San Diego for an

accounting major with a BS degree >$52K• Other accounting certifications:

– Certified Management Accountant (CMA)– Certified Internal Auditor (CIA)

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Accounting CareersAccounting Careers

• https://www.youtube.com/watch?v=9I502zLYZXU

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Why Accounting?Why Accounting?